Bitcoins mining difficulty drops over 7 percent

Even though there has been a recent recovery that has taken bitcoin above USD 4,000, many miners are still finding it difficult to remain profitable or break even. As such, CCN reported in November 2018 that Chinese cryptocurrency miners are dumping their mining rigs or re-purposing them for non-blockchain uses, such as video rendering and cloud computing. Also, several cryptocurrency mining operations across Europe and Asia are shutting down because of the bear market.

However, the network is designed to automatically adjust the difficulty level, so that it avoids situations where there is a huge transaction confirmation backlog and high confirmation fees. The 7% drop in difficulty is likely to be the start of a similar difficulty readjustment pattern as bitcoin below USD 6,000 increasingly becomes a prolonged reality. Miners leaving bitcoin are not merely switching to other cryptographically similar cryptocurrencies, but are exiting the cryptocurrency mining space altogether.

All that being said, this is not likely to create any disruption in the normal functioning of bitcoin in the short term, as the dynamic difficulty adjustment system will ensure that there is enough hashpower to service the network.